Anne H. DeClouette | University of Phoenix

CONSIDERING VENUS: FEMALES ON AMERICAN CORPORATE BOARDS COMPARED GLOBALLY

A PLAY ON THE CLASSIC BOOK

Men and women:

o Communicating

o Thinking

o Perceiving

o Etc.

AGENDA

Purpose

Literature Review

Method

Results

Discussion

Conclusion

AGENDA

Purpose

Literature Review

Method

Results

Discussion

Conclusion

DeClouette (2009) dissertation research

Have boards of directors changed? A study of the impact of Sarbanes-Oxley legislation on corporate governance

Board demography gender demography

Gender diversity on boards of current Dow Jones Industrial Average (DJIA)

Theoretically compare female board composition on DJIA to published research on other countries

Question: Regarding gender diversity on corporate boards, how do large American companies stack up to those around the world?

PURPOSE

AGENDA

Purpose

Literature Review

Method

Results

Discussion

Conclusion

• Male dominated globally

• “Old boys’ clubs” (Bilimoria, 1994, p. 1457)

• “Gentlemen’s clubs” (Khurana, 2002, p. 85)

• “Male club” (Broome, 2008, title)

BOARDS OF DIRECTORS

• Culture influences governance models (DeClouette & Migliore, 2010)

• Patriarchal societies

• Asian: religion based (Rowley, Lee & Lan, 2015; Abdullah, Ku Ismail & Nachum, 2013)

• China: “office flower” and “for decorative purposes” (Rowley et al., 2015, p. 205)

• “Bamboo ceiling” (Hyan, 2006, title)

• Women entrepreneurs - rejecting meaningless board opportunities (Rowley et al., 2015)

CULTURAL INFLUENCES

• Ask more questions (Adams & Ferreira, 2009;

Willows & van der Linde, 2016)

• Encourage more genuine discussion,

problem resolution and creativity (Lazzaretti,

Dodoi, Camilo & Marcon, 2013)

• Consider company’s reputation and image (Willows & van der Linde, 2016)

• Corporate social responsibility (Yaroson &

Giwa, 2016)

• Risk averse (Willows & van der Linde, 2016)

• Reduces likelihood of tax aggressiveness in

Australia (Richardson, Taylor & Lanis, 2016)

PROS/CONS: FEMALE BOARD MEMBERSHIP

• Over-monitor

• Favorable accounting performance, lower market performance (Abdullah et al., 2013)

• Beneficial: cos. with weak shareholder rights; Detrimental: cos. with strong share-holder rights (Adams & Ferreira, 2009)

• Minimum of three women on the board has been established (Wang & Kelan, 2013)

• Normalizing female presence so the board can reap the full benefits of gender diversity

• One or two female board members (Branson, 2007; Willows & van der Linde, 2016)

• One female on board is “high” in Australia (Richard et al., 2016)

• If female, most likely to have one in Brazil (Lazzaretti et al., 2013)

• One female director in India (Bhalla, 2015; Catalyst, 2017)

TOKENISM VS. CRITICAL MASS

• Interventionist

• Comply-or-explain

• Voluntary

APPROACHES: INCREASING FEMALE BOD MEMBERS

INTERVENTIONIST

• Norway set the example with a regulatory

standard of at least 40% for each gender.

• Three Phases (Wang & Kelan, 2013)

• Sanction: Forced liquidation

• France: no pay for board members

• Spain: 40%; no government contracts

• Italy: time to comply fines more time to comply lose seats (Catalyst)

• Germany: 30%

• South Africa: 50% “representation and participation of women in decision-making structures …” (Republic of South Africa, 2014, pp. 4 – 5)

• India: At least one; of cos. that complied, “mockery” (Bhalla, 2015, para. 4)

INTERVENTIONIST

“… governments issue recommendations related to women’s presence on boards but do not enforce them” (Abdullah, Ku Ismail & Nachum, 2013, p. 5).

• Australia: Time to comply, then after third year, go on published list

• Barred from winning govern-ment contracts (Catalyst, 2017)

• “Women on Boards” campaign (Willow & van der Linde, 2016)

• AICD – classes, mentorship, board nominations (Lazzarettiet al., 2013)

COMPLY OR EXPLAIN

• Finland: 40%

• Netherlands: 30%

• Report Diversity Policy with Compliance Info

• Don’t meet targets?

• Explain why and what actions are being taken

• (Catalyst, 2017; Lazzaretti et al., 2013)

• “an incremental average increase … of just 0.6 percentage points per year has been recorded since 2003” (European Union, 2012, para. 1)

• Goal of 40% female board representation by 2020

• “… it would still take around 40 years to even get close to gender balance in boardrooms (at least 40% of both sexes)” (para. 8) in large European companies

VOLUNTARY

VOLUNTARY• At the current growth rate, it will take over two centuries to reach

gender parity on corporate boards in the United Kingdom (Lazzaretti, 2013 citing Martin et al. 2008)

• Lord Davies of Abersoch expressed “delight” (p. 4) in surpassing the 25% female board participation target at Financial Times Stock Exchange (FTSE) 100 companies at 26.1% - up from 12.5% in 2011

• New goal is 33% for the FTSE 350 by 2020

• USA: no serious policy discussion

• Movements and campaigns (Catalyst; Women on Boards)

• Consulting firms, interest groups (Spenser Stuart; McKinsey & Co.; NACD)

• Constitutionality of quota? (Winters & Jacobs-Sharma, 2016)

• California Concurrent Resolution 62 (Jackson et al., 2013)

AGENDA

Purpose

Literature Review

Method

Results

Discussion

Conclusion

• Exploratory Longitudinal Quantitative

• Sample: DJIA (30 companies)

• Secondary data: Proxy Statements (DEF 14A)

• Three data points: 2001, 2007 and 2016

• Descriptive Stats

• Theoretical integration

METHOD

AGENDA

Purpose

Literature Review

Method

Results

Discussion

Conclusion

TABLE 1 STATISTICS FOR DJIA COMPANIES

Women

Directors

Total

Directors

Women

Directors

Total

Directors

Women

Directors

Total

Directors

Companies 29 29 29 29 30 30

Total 60 382 62 367 81 356

Mean 2.07 13.17 2.07 12.23 2.70 11.87

Min 0 8 0 8 1 8

Max 4 18 4 16 4 16

Mode 2 12 2 12 2 12

2001 2007 2016

Statistic

TABLE 22016 FEMALE REPRESENTATION (DJIA)

Company

%

Women

# of

Women Company

%

Women

# of

Women Company

%

Women

# of

Women

Cisco Systems 36.4% 4 Disney 27.3% 3 JP Morgan 18.2% 2

Verizon 30.8% 4 Pfizer 27.3% 3 Chevron 18.2% 2

Proctor&Gamble 30.0% 3 Microsoft 27.3% 3 Dupont 18.2% 2

Coca-Cola 26.7% 4 3M Co. 16.7% 2

IBM 26.7% 4 Boeing 16.7% 2

Apple 25.0% 2 Caterpillar 16.7% 2

Nike 25.0% 3 Goldman Sacs 15.4% 2

Wal-Mart Stores 25.0% 3 United Technologies 15.4% 2

McDonald's 25.0% 3 Intel 10.0% 1

General Electirc 25.0% 4

Home Depot 25.0% 3

The Travelers Cos. 23.1% 3

Merck 23.1% 3

American Express 23.1% 3

Visa 22.2% 3

Exxon Mobil 21.4% 3 `

UnitedHeath Group 20.0% 2

Johnson & Johnson 20.0% 2

30% or Above Between 20 - 29% Under 20%

AGENDA

Purpose

Literature Review

Method

Results

Discussion

Conclusion

• Gender Parity (40%): 0%

• Gender Diversity1 (30%): 10%

• Gender Diversity2 (20%): 70%

DISCUSSION (PAPER)

• Critical Mass >= 3: 60%

• Token 2: 37%

• Token 1: 3%

AGENDA

Purpose

Literature Review

Method

Results

Discussion

Conclusion

Gender Equity: 40 yrs

(European Commission, 2012)

CONCLUSION

Gender Equity: 200 yrs

(Lazzaretti, 2013 citing Martin et al., 2008)

Tokenism Diversity Equity

Voluntary vs. Legislative

Voluntary: Have benchmarks with year targets

Legislative: Phase in period & Sanctions with teeth

“… as much a competitiveness issue as a question of equality” (Magnusson & Carlstrom, 2016, para. 16)

More about gender diverse boards producing better company and societal outcomes than simply women being on the board

Abdullah, S., Ku Ismail, K. N. I. & Nachum, L. (2012). Women on boards of Malaysian firms: Impact on market and accounting performance. Available at https://ssrn.com/abstract=2145007 or http://dx.doi.org/10.2139/ssrn.2145007 Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291-309. doi:10.1016/j.jfineco.2008.10.007 Bhalla, N. (2015 April 2015). Indian firms mock gender diversity as boardroom deadline passes – analysts. Reuters: India Edition. http://in.reuters.com/article/india-women-directorsidINKBN0MS4G120150401 Bilimoria, D., & Piderit, S. K. (1994). Board committee membership: Effects of sex based bias. Academy of Management Journal, 37(6), 1453. Branson, D. M. (2007). No seat at the table: How corporate governance and law keep women out of the boardroom. New York: New York University Press. Broome, L. L. (2008). The corporate boardroom: Still a male club. Journal of Corporation Law, 33(3), 665. Catalyst. (2017). Women on Corporate Boards Globally. Retrieved from: http://www.catalyst.org/knowledge/women-corporate-boards-globally Davies, L. (2015). Women on Board Davies Review Five Year Summary. Department for Business, Innovation & Skills. Available: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/482059/BIS15-585-women-on-boards-davies-review-5-year-summary-october-2015.pdf DeClouette, A.H. (2009). Have boards of directors changed? A study of the impact of SarbanesOxley legislation on corporate governance. Retrieved from: http://gradworks.umi.com/33/69/3369551.html

DeClouette, A. H. & Migliore, L.A. (2010). The Intersection of Corporate Governance Practices and National Culture in Emerging Markets. Retrieved from: https://ssrn.com/abstract=1717109 European Commission. (2012). Women on Boards: Commission proposes 40% objective. Retrieved from: http://europa.eu/rapid/press-release_IP-12-1205_en.htm Hyan, J. 2006. Breaking the bamboo ceiling: Career strategies for Asians. New York: HarperCollins. Jackson, & Corbett, & Evans, & Hancock & Liu, & Pavley, & Garcia & Lowenthal & Skinner. (2013). California Senate Concurrent Resolution 62—Relative to women on corporate boards. Retrieved from: http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_00510100/scr_62_bill_20130711_introduced.pdf Khurana, R. (2002). Searching for the corporate savior: The irrational quest for charismatic CEOs. Princeton, NJ: Princeton University Press. Lazzaretti, K., Godoi, C. K., Camilo, S. P. O., & Marcon, R. (2013). Gender diversity in the boards of directors of Brazilian businesses. Gender in Management: An International Journal, 28(2), 94 – 110. http://dx.doi.org/10.1108/17542411311303239 Magnusson, N. & Carlstrom, J. (2016). Swedish Board Gender-Quota Proposal Killed by Opposition Parties. Bloomberg. Retrieved from: https://www.bloomberg.com/news/articles/2016-0909/swedish-government-plans-40-gender-quota-for-corporate-boards Republic of South Africa. (2013). The Women Empowerment and Gender Equality Bill. Retrieved from: http://www.gov.za/sites/www.gov.za/files/Bill50C-2013_27Mar2014.pdf Richardson, G., Taylor, G., & Lanis, R. (2016). Women on the board of directors and corporate tax aggressiveness in Australia: An empirical analysis. Accounting Research Journal, 29(3), 313-331. doi:10.1108/ARJ-09-2014-0079 Rowley, C., Lee, J. S. K., & Lan, L. L. (2015). Why women say no to corporate boards and what can be done: “Ornamental directors” in Asia. Journal of Management Inquiry, 24(2), 205-207. doi:10.1177/1056492614546263 Wang, M., & Kelan, E. (2013). The gender quota and female leadership: Effects of the Norwegian gender quota on board chairs and CEOs. Journal of Business Ethics, 117(3), 449-466. doi:10.1007/s10551-012-1546-5 Willows, G., & van der Linde, M. (2016). Women representation on boards: A South African perspective. Meditari Accountancy Research, 24(2), 21 Winters, T. & Jacobs-Sharma, M. (2016). "Gender Diversity on Corporate Boards: The Competing Perspectives in the U.S. and the EU" Comparative Corporate Governance and Financial Regulation. Paper 13. Retrieved from http://scholarship.law.upenn.edu/fisch_2016/13 Yaroson, E., & Giwa, G. (2016). Women as directors and corporate social responsibility in Nigeria. International Review of Management and Business Research, 5(1), 97.

REFERENCES

… for listening and for your feedback!

Anne H. DeClouette

DISCUSSANT